KUALA LUMPUR, July 24 Malaysia's Reach Energy
Bhd, a special purpose acquisition company (SPAC) with no
existing assets, has locked in up to seven cornerstones for its
750 million ringgit ($236.93 million) IPO, two sources involved
with the deal said.
The IPO could mark Malaysia's largest listing by a shell
company with no assets. A SPAC is set up with the intention of
buying firms that will be later folded into the business.
The cornerstone investors will take up about 150 million
ringgit of the offer, the sources said. The cornerstones include
pilgrim fund Lembaga Tabung Haji, CIMB Principal Asset
Management, Hong Leong Asset Management and Malaysia's
infrastructure firm MTD Capital, the sources added.
So-called cornerstone investors are important to the success
of an IPO, allowing the underwriters to show potential
institutional investors that the deal already has solid
financial backing. In return, cornerstones receive preferential
But unlike many other IPO deals in Malaysia, cornerstone
investors in Reach are not subject to a lock-up period,
according to the sources.
Reach is scheduled to debut on the local bourse Aug 15, the
The sources declined to be named as they are not authorised
to speak to the media. Reach representatives were not
immediately available to comment.
The SPAC, led by Shahul Hamid Mohd Ismail who used to helm
Malaysia-listed Shell Refining Company Bhd, is looking
to buy firms involved in Asia's oil and gas exploration and
production sector, according to the draft prospectus.
The IPO comprises 1 billion shares at an issue price of 75
sen each. The offer comes with 1 billion free detachable
warrants on the basis of 1 warrant for 1 share subscribed.
Hong Leong Investment Bank is the principal adviser,
placement agent and underwriter.
($1 = 3.1655 Malaysian Ringgit)
(Reporting By Yantoultra Ngui; Editing by Stephen Coates)